how to buy netflix stock

Cuban’s announcement comes after Netflix late Wednesday said its recent price increases contributed to a disappointing number of new users in the third quarter, a harbinger of slowing U.S. growth even as the online video-streaming company prepares to face a new challenge from rival HBO.
“I see Netflix as being the epicenter for content and growth right now and that’s why I bought it,” Mr Cuban added.
in recent days, billionaire investor Mark Cuban announced Friday that he is buying shares in the company–and says he thinks its a takeover target.
“Relative to other media companies and other tech companies, it’s just so far undervalued,” Mr.
A presentation of and reconciliation to the most directly comparable GAAP financial measure, where such can be done without unreasonable effort, can be found on our Web site at The forward looking statements are made as of the date of broadcast and the Company undertakes no obligation to update such forward-looking statements.
Actual results may differ materially from those anticipated in these statements based on a number of factors, including those identified in the company’s annual report on Form 10-K filed with the SEC on February 3, 2014.
The following webcasts contain forward-looking statements relating to future events or future financial performance of the Company that involve risks and uncertainties.
The stock information is provided by eSignal, stock charts are provided by NASDAQ OMX, both third party services, and Netflix does not maintain or provide information directly to this service.
Now, to be fair, Netflix should trade at a premium to the broader market. It’s a fast-growing company and it deserves a high multiple. But 55 times expected earnings? That assumes that the high growth of recent years will continue indefinitely, which is a very dangerous assumption to make.
Netflix is a great company. I would go so far as to call it a revolutionary company, in fact. Largely because of Netflix, TV viewers now expect on-demand programming available on any device at any location at any time. Traditional media distribution channels—such as cable TV companies—are scrambling to adapt their offerings to match the format of Netflix.
If you are willing to watch the trade carefully and use stop losses or other risk management tools, then I would say buy it with your speculative “play money.” But at current prices, Netflix is a terrible investment, and I wouldn’t recommend putting a dime of your retirement nest egg in its stock.
Netflix beat expectations in every way a company can beat expectations, increasing its customer base, revenues, earnings per share and even its gross margins more than the consensus Wall Street estimates.
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The two biggest concerns for analysts have been rising content costs and the loss of “net neutrality,” which potentially allows internet service providers to extort higher fees from Netflix in order to give its streaming service continued access to premium bandwidth.
But even great companies can be lousy stocks if they are priced too expensively. Netflix currently trades for 325 times trailing earnings and 55 times expected 2014 earnings.
But viewers upset that their favorite Netflix programs are buffering due to reduced bandwidth are far more likely to take out their frustrations on their internet providers.
Thus far, it hasn’t been reflected in Netflix’s results; top-line revenues have grown at a faster pace than content costs, and Netflix’s gross margins actually improved last quarter.
I also don’t like the persistent insider selling by company management. As I noted in the interview, it is not uncommon to see insider selling in relatively young start-up companies. Yet in Netflix’s case, the insider selling is heavy and persistent enough to get my attention.
With Netflix competing for content with Hulu, Amazon, Apple Apple, and Wal-Mart‘s Vudu services–and with the content creators aware of Netflix’s subscriber growth–it only stands to reason that content costs should rise, which–all else equal–should erode Netflix’s margins.
Hastings and Netflix CFO David Wells conceded in a letter to shareholders in the third quarter of last year that "some of the euphoria" in the stock last year felt like 2003 all over again.
Bacarella said that as long as Netflix has earnings momentum on its side, he’s happy to stick with the stock — despite a valuation that even OITNB’s Suzanne would probably deem a little crazy-eyed.
"Netflix is overpaying for content to drive growth … but it may not be profitable growth," said Brad Lamensdorf, co-manager of Ranger Bear Equity (HDGE), an actively managed exchange-traded fund that shorts individual stocks and is currently betting against Netflix.
Netflix stock was hit so hard earlier this year, it made you wonder if billionaire Raymond Tusk from "House of Cards" was shorting it.
"This is a company right in the thick of things regarding the wave of the future in media," said Bob Bacarella, manager of the Monetta Fund and an owner of Netflix stock.
With Netflix now trading at a market value of about $25 billion, it’s not out of the realm of possibility for it to one day be bigger than some of its old media "frenemies." Discovery Communications (DISCA), which owns the Discovery Channel, TLC, and Animal Planet, is worth about $28 billion.
He notes that Netflix’s recent $1 a month increase for new customers is relatively small … and he predicts that prices may come down as Amazon and Hulu ramp up their original content and licensing deals with other media companies even more than they are currently.
Unless Netflix finally has a major hiccup that would make investors question whether its best days are behind it, the stock will probably keep climbing.
With season 2 of Netflix’s dark prison comedy "Orange is the New Black" available for binge watching on Friday, I figured now’s a good time to analyze Netflix’s valuation and growth prospects.
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As James Twining, president of Financial Plan, said, “Absolutely no one, without inside information, has the slightest idea as to the magnitude or direction of the future price of Netflix or any other stock for that matter.
Reed Hastings, the CEO, and his team understand the first rule of management: manage for the long haul, and not for short-term gains to artificially goose the stock price.
become fixated on ways to prop up the company’s stock price, then they won’t be concentrating on managing the business for growth.
Among other issues, new subscriber figures kept falling short of Wall Street estimates, and Netflix had to backtrack on its stupid idea to split the company into two separate services.
You certainly could play Netflix as a short-term trade – if you watch it vigilantly, maintain a stop-loss order and remember to raise your stop-loss proportionately as the stock continues to rise.
Vulnerable Balance Sheet: Netflix’s balance sheet has improved over the last decade and it carries relatively little long-term debt — but it’s still not all that strong.
Too bad the last time Netflix stock went on this kind of tear, it crashed and burned in an epic meltdown.
Netflix stock is well above both its 50- and 200-day moving averages, which suggests plenty of technical strength and upside in the short- to medium-term.
Thin Margins, Low Quality: Netflix’s operating margin stands at just 3% and the net profit margin comes to 1.2%. Even famously low-margin Walmart (WMT) has a net profit margin of 3.6%. With margins that thin, the company has little room for errors that would push it into a net loss.
Netflix added 633,000 streaming subscribers in the most recent quarter, bringing its U.S. total up to nearly 30 million.
Furthermore, Netflix’s long-term growth rate is forecast to average 23% a year for the next five years.
The proximate cause was an announcement that Netflix struck a deal with Virgin Media (VMED) to embed a Netflix app in the U.K. broadband company’s set-top cable boxes.
Valuation: Netflix’s stock hasn’t been reasonably valued since it fell to $50 a share, but lately it’s gone bonkers.
Robust Growth: Wall Street analysts forecast earning per share to quintuple this year — to $1.49 from 29 cents a year ago.
Sure, margins in Europe stink right now and Netflix stock investors have to be OK with a reversal in this impressive earnings growth — something short-term momentum traders have no interest in.
Now, NFLX stock fireworks are going off after Netflix earnings showed double the profits, and the company boasted 50 million subscribers.
If Reed Hastings is accelerating growth in 2014 beyond even this impressive pace, it’s hard to see that as a net negative for long-term investors in Netflix stock.
Looking at the daily Netflix stock chart below, you see the last earnings report as the stock gapped from the $330 area up to the $390 area before running all the way up to the $460 area in March.
Now that HBO has announced its intent to compete in the streaming area in 2015, and subscriber growth has failed to meet forecasts, it looks like investors are running for the hills, but a closer look shows that the outlook for Netflix may not be so bleak.
Top analyst Mark Mahaney, who likes the stock at this price and has rated it "outperform," is confident in Netflix’s future: "We think the package, the offering, from Netflix each year gets better and better for consumers, and more consumers will sign up for it.
After spinning off the original business model, the DVD rental service, into the ill-fated Qwikster, Netflix morphed into the worlds largest video streaming service.
After bad news sent Netflix stock into free fall, a top technology analyst argued that the sell off was actually a buying opportunity.
As a result, the stock price dropped precipitously and the company lost a full quarter of its value as some investors wondered if the service can survive.
Other pundits also believe that HBO’s new entry will hurt the other pay channels more, and even cannibalize HBOs own pay cable service, as opposed to affecting Netflix.
The only smart move would be for NFLX to spin off the DVD side of the business to stay afloat.
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It's about time there's been a bit of a correction in its price.
The DVD side of the business which is making money off sets the streaming side which is losing money.
A fair value for NFLX is around $60, based on a discounted cash flow valuation.
Analysts at Zacks reiterated a “neutral” rating on shares of Netflix in a research note on Friday, August 22nd.
Finally, analysts at Topeka Capital Markets raised their price target on shares of Netflix from $517.00 to $527.00 in a research note on Monday, August 11th.
reiterated a “market perform” rating on shares of Netflix in a research note on Friday, August 15th.
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Netflix (NASDAQ:NFLX) traded up 0.64% on Friday, hitting $475.68. The stock had a trading volume of 1,707,298 shares.
“We continue to believe that Netflix has achieved a level of sustainable scale, growth and profitability that isn’t currently factored into its stock price,” RBC Capital markets analyst Mark Mahaney told Investor’s Business Daily.
The post Why Netflix Stock (Nasdaq: NFLX) Is Cheaper Than It Looks appeared first on Money Morning – Only the News You Can Profit From.
As the Netflix business model accelerates earnings over the next few years, the NFLX stock price will follow.
That’s why investors have been selling Netflix stock over the past week, knocking shares down from an all-time high of $489.29 hit on Sept.
Add in the general jitters about a possible stock market correction, and it’s no wonder Netflix stock has slipped from its highs.
“International subscriber growth is the most important variable driving stock performance for the foreseeable future,” Morgan Stanley analyst Benjamin Swinburne said in a research note.
UP NEXT: Microsoft may or may not buy Netflix, but under new CEO Satya Nadella, MSFT stock has finally shed its decade-long “laggard” status.
Research firm IHS Technology estimates that the addition of the six new European countries alone will result in 5 million to 6 million new Netflix subscribers by 2018.
This means that in order for Netflix to even be considered as growth stock investment (PE ratio of 20 or less) at current 5 year average earnings levels it would need to trade at $42 – $43.
That means because Netflix is a large cap stock having a market capitalisation of over $10 billion, it would need to be selling in the market at a PE ratio of 12 or less, in other words $25 per share or less.
I have a slight suspicion that my cursory valuation will show that Netflix is overvalued, not hard considering the rise of Netflix last year along with the rest of the market but I wanted to crunch some numbers anyway to see just how much people will be overpaying if they decide to take a position.
Together with the weekly share tip I mentioned the use of CFD’s (and spread betting) in yesterday’s free edition of The Value Investor Report as a means by which private investors could short a main market index when the correction does finally arrive.
That means you would be overpaying today by $321 and that’s if Netflix still continued to have the growth potential it has shown over the last 18 months which at these elevated prices is optimistic to say the least.
Investing in a company through their direct stock purchase plan has plenty of advantages, including no brokerage commissions or fees.
While an investor may avoid certain broker fees, some companies charge administration and automatic investment fees for investors buying stock directly from them.
Many companies offer direct stock purchase plans (DSPP) offering a low cost way to invest in their organization.
While purchasing stock directly from a company or transfer agent has plenty of advantages, there are a few things investors should consider first.
Using a direct stock purchase plan has advantages over both traditional and online discount brokers.
For as many reasons as there are to like direct stock purchase plans, there are some disadvantages investors should be aware of.
John Schroeder writes about investing and other topics at Passive Family Income where he shares his goals on how to create passive streams of income so he can spend more time doing the things he enjoys, and less time working.
The stock market wrapped up its best year since the booming ‘90s with a 29 percent gain to close out a record-breaking 2013.
Corporations, such as Netflix, Best Buy, and Twitter, saw huge earning growth as the economy gained traction.
Last Wednesday, Mark Mahaney, a Citigroup analyst also helped send the stock price up when he called Netflix a "screaming buy." The upgrades were based in part on the belief that Amazon isn’t as big a threat as some feared and that the Seattle-based retailer is unwilling to spend as much as Netflix to acquire movies and TV shows.
Carl Icahn Lost $200 Million On Netflix Over Night Carl Icahn is has lost $200 million on Netflix stock since Wednesday, when the company’s stock plunged 27% in after hour trading.It all fell apart when Netflix reported lower than expected subscriber growth than expected in its 4th quarter earnings.
Netflix shares tank 20% on weak results Netflix may be paying the price for raising the price of its subscriptions.Shares plunged more than 20% in after-hours trading Wednesday after the streaming video service reported subscriber growth that came up short of its forecasts.
Netflix Stock Opens Down 25% After Missing New Subscriber Target Yesterday, as part of its third quarter earnings news, Netflix (NASDAQ:NFLX) reported not acquiring as many new subscribers as it had previously forecasted.
Netflix Shares Drop After HBO Reveals Plans for Internet-Based Streaming Service Netflix’s stock slipped about 2% after HBO made a surprise announcement that it would launch a standalone, over-the-top U.S. streaming service in 2015 — representing a potentially robust new competitor to the No.
NETFLIX IS GETTING TOTALED Netflix stock is getting totaled, down 23% at the market’s open.On Wednesday the company reported much lower than expected subscriber growth in the 3rd quarter.
Netflix Misses Sub-Growth Targets, Blaming Price Increases Netflix added 3.02 million overall streaming customers for the third quarter of 2014 — below its previous projections of 3.69 million for the period, as both U.S. and international growth failed to meet its forecasts.
Netflix Stock Falls 25% After Missing Subscriber Growth Numbers Netflix’s rough day just got even worse.Netflix revealed that it missed its own subscriber forecast for the September quarter, adding fewer than one million new members domestically.
HBO Streaming Announcement Sends Netflix Stock Tumbling HBO announced Wednesday that it will offer a standalone streaming service to attract people who don’t subscribe to traditional cable.